Trilemma Indices Updated

The Aizenman, Chinn and Ito indices that measure how countries align their policies to conform to the Trilemma [1][2] [3] have been updated to 2009. Below is a time series plot of exchange rate stability, monetary independence and capital account openness for China.

The monetary independence index depends on the correlation of a country's interest rates with the base country's interest rate, the exchange rate stability index is measured by the exchange rate volatility, and the degree of financial integration is measured with the Chinn-Ito capital controls index.

The data (Excel, Stata), as well as associated documentation are here. All you wanted to know about the capital openness index, here.

Related

Yesterday, Greg Mankiw discussed the trilemma in international finance, noting that countries can trade off between capital mobility, monetary policy autonomy, and exchange rate stability, but cannot fully all three of those objectives at a given time.

Jérémie Cohen-Setton has a nice review of the recent blog-literature regarding the trilemma on Bruegel:
The challenge of managing capital flows in and out of emerging countries and the difficulty of transmitting a uniform monetary stance across EMU countries have generated renewed interest in the possibility of better navigating the Mundell-Fleming

Mr. Trump has proposed blocking remittances of illegally earned wages to Mexico as a means of inducing Mexico to pay for a border wall. What does this imply for financial openness?
As argued O’Grady in Wall Street Journal:

From "Rounding the Corners of the Policy Trilemma:
Sources of monetary policy autonomy," by Michael Klein and Jay Shambaugh:
A central result in international macroeconomics is that a government cannot simultaneously
opt for open financial markets, fixed exchange rates, and monetary autonomy; rather, i

Chinn-Ito Index Updated to 2011
Our index, based upon the IMF’s tabulation of external account restrictions, has been updated to 2011. We find (1) retrenchment in emerging markets, (2) and regionally, little change on average in East Asia/Pacific and South Asia/Middle East and Africa.

I’ve been wrapping up some long term projects (not planned as long term — they just took longer than expected) on interest rate parity and term spreads, and that spurred me to look at current patterns in interest rates. Some quick observations: interest rates remain higher in emerging markets than in core industrial countries. So too are real rates are higher despite higher inflation rates. And term spreads are larger in the US than other countries.
First, consider nominal interest rates.